Two more years added to curb foreign housing purchases, boosting affordability
Chrystia Freeland, Deputy Prime Minister and Minister of Finance, has announced an extension of the ban on foreign ownership of Canadian housing.
This extension means that foreign commercial enterprises and individuals who are not Canadian citizens or permanent residents will be prohibited from purchasing residential property in Canada until January 1, 2027.
The initial ban, set to expire on January 1, 2025, targets the influx of foreign money into Canada's residential real estate market, which has been a contributing factor to the soaring housing prices, especially in major urban centres.
This measure is part of the federal government's comprehensive strategy to make housing more affordable for Canadians, addressing the challenges of Canadians being priced out of the housing market.
By extending the foreign buyer ban, the government aims to ensure that houses serve as homes for Canadian families rather than becoming speculative financial assets. The ban on foreign ownership of Canadian housing is one of several tools the federal government is employing to tackle the housing affordability crisis.
Significantly, the federal housing investment has more than doubled since 2015, with a $9bn increase in 2023-24 compared to 2013-14.
The Prohibition on the Purchase of Residential Property by Non-Canadians Act, passed in 2022, is a critical component of these efforts, alongside the 2023 Fall Economic Statement's investments aimed at building more homes faster and enhancing housing affordability across the country.
These initiatives include the Affordable Housing and Groceries Act, which exempts new rental housing from the Goods and Services Tax (GST), and a series of financial programs designed to support the construction and repair of affordable and rental homes.
Additionally, the federal government is implementing the Housing Accelerator Fund to encourage municipalities to expedite housing construction by eliminating zoning barriers, with a goal of fast-tracking the construction of over 100,000 homes in the next three years.
Other measures include the Rapid Housing Initiative, the Federal Lands Initiative, and new financing strategies to increase the production of rental apartments.
Furthermore, the Canadian Mortgage Charter and the Tax-Free First Home Savings Account have been introduced to provide mortgage relief and assist Canadians with their first home purchase, respectively.